ECO3041 - Ch 9 Review Qs - Chapter 9 Review Questions...

Questions: 1. Nonrivalry and nonexcludability are the main characteristics of: A) consumption goods. B) capital goods. C) private goods. D) public goods. 2. Which of the following is an example of a public good? A) a weather warning system B) a television set C) a sofa D) a bottle of soda 3. An example of a public good is: A) broadband Internet access. B) homeland defense. C) a baseball. D) a lawn mower. 4. A positive externality or spillover benefit occurs when: A) product differentiation increases the variety of products available to consumers. B) the benefits associated with a product exceed those accruing to people who consume it. C) a firm produces at the P = MC output. D) economic profits are zero in the long run. 5. A negative externality or spillover cost occurs when: A) firms fail to achieve allocative efficiency. B) firms fail to achieve productive efficiency. C) price exceeds marginal cost.

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